Lawyer, 14 others charged in $20M ‘prince and pauper’ mortgage and welfare scheme
A real estate closing attorney and appraiser have been federally indicted, along with more than a dozen other individuals, in what the U.S. Attorney for Manhattan describes as a long-running $20 million “prince and pauper” mortgage and welfare fraud scheme.
Attorney Martin Kofman, 53, is accused only of misusing his role as a real estate lawyer, the Journal News reports. He is accused of “distribut[ing] fraudulent loan proceeds between and among members of the conspiracy” and providing lenders with false information, WABC reports.
However, appraiser Pinchus Glauber, 53, and some other defendants were accused of double-dipping—pretending poverty in order to qualify for public assistance while at the same time working to obtain mortgages, based on inflated property value and/or income claims.
Most of the real estate on which lenders reportedly granted some $20 million in mortgages between 2004 and 2014 has gone into default.
The articles don’t include any comment from Kofman or his legal counsel, but an attorney for Glauber told the Journal News his client will plead not guilty and performed only three appraisals.
“He didn’t gain financially one cent,” attorney Kenneth Gribetz told the newspaper, adding: “He works hard. His only compensation was a minimal fee for the appraisal. We hope he will be vindicated.”
A real estate developer and 11 members of his Brooklyn-based extended family are also defendants in the case. They are accused of funding personal expenses through the fraud scheme, which allegedly involved falsified documents and concealed assets and identities. Participants bought and sold properties in a scheme so convoluted that authorities are still trying to figure out exactly what they own, according to the Associated Press.
Federal prosecutors are seeking the forfeiture of nearly two dozen properties and several bank accounts.
“The defendants involved alternately played the parts of prince and pauper depending on which scam was being perpetrated,” said U.S. Attorney Preet Bharara at a White Plains news conference. “There’s a lot of fraud here and shell games. … The fraud was complex, and they were fairly organized.”
Related coverage:
Jewish Daily Forward: “$20M Hasidic Fraud Suspects Claimed To Be Millionaires and Paupers—at Same Time”